Correlation Between Xtrackers LevDAX and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Marathon Petroleum at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Xtrackers LevDAX and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Marathon Petroleum, you can compare the effects of market volatilities on Xtrackers LevDAX and Marathon Petroleum and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Xtrackers LevDAX with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Marathon Petroleum.
Diversification Opportunities for Xtrackers LevDAX and Marathon Petroleum
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Marathon is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Marathon Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marathon Petroleum and Xtrackers LevDAX is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Xtrackers LevDAX are associated (or correlated) with Marathon Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marathon Petroleum has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Marathon Petroleum go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Marathon Petroleum
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.82 times more return on investment than Marathon Petroleum. However, Xtrackers LevDAX is 1.22 times less risky than Marathon Petroleum. It trades about 0.07 of its potential returns per unit of risk. Marathon Petroleum is currently generating about 0.04 per unit of risk. If you would invest 14,512 in Xtrackers LevDAX on August 27, 2024 and sell it today you would earn a total of 3,910 from holding Xtrackers LevDAX or generate 26.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Marathon Petroleum
Performance |
| Timeline |
| Xtrackers LevDAX |
| Marathon Petroleum |
Xtrackers LevDAX and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Marathon Petroleum
The main advantage of trading using opposite Xtrackers LevDAX and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Marathon Petroleum can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Marathon Petroleum will offset losses from the drop in Marathon Petroleum's long position.| Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
| Marathon Petroleum vs. Corsair Gaming | Marathon Petroleum vs. FORWARD AIR P | Marathon Petroleum vs. Altair Engineering | Marathon Petroleum vs. AUSTEVOLL SEAFOOD |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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